With market participants having been disappointed by the Monetary Policy Committee’s inaction in July, expectations of a bolder and broader package of measures at next week’s meeting have grown. With recent activity data showing a slowdown underway and August’s Inflation Report likely to paint a markedly more pessimistic outlook for the economy compared to May’s, we expect the MPC will deliver. Indeed, we think that Bank Rate will be cut by 25bp, and that an expansion of the quantitative easing programme will be announced.
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